The Entrepreneur’s Source reviews the aspects of the franchise industry that aspiring franchisees should have a grasp of before investing in an opportunity.

1. The Entrepreneur’s
Source
FRANCHISING 101 FROM THE ENTREPRENEUR’S
SOURCE

2. Franchising 101
Have you been longing to make a career change, but haven’t taken the necessary steps because you
don’t know the options that stand before you? Well, there are plenty of vehicles to success that
may be the right fit for your Income, Lifestyle, Wealth and Equity (I.L.W.E.) Goals and the future you
envision for yourself. Do you want to spend more time with your family? Do you want to be your
own boss? Do you wish to live a more comfortable lifestyle? If these are some of your I.L.W.E. Goals,
then franchising may be the great way for you to attain the success you desire.
Franchising is one of the largest and most profitable industries in the U.S. In 2015, the franchise
sector is predicted to grow at a faster pace than the rest of the economy. Why wouldn’t you want
to capitalize on the franchise sector’s great development potential as a route to self-sufficiency?
However, franchising is vast and can be complex, so it’s important to have an understanding of the
basics of the franchise industry before taking the leap of faith. Today, The Entrepreneur’s
Source reviews the basics of the franchising industry that all aspiring franchisees should have a
grasp of before investing in a franchise opportunity.

3. Q: What’s franchising?
A: According to the U.S. Small Business Association (SBA), franchising is a way of
doing business. A franchise brand and an aspiring franchisee or entrepreneur
sign an agreement in which licenses, trademarks or systems are invested in for
use by the aspiring entrepreneur. The key to franchised businesses is that they
have proven business models in place with established systems and processes
which makes them replicable and duplicable. There are thousands of different
franchise concepts in the marketplace today in over 70 different industry sectors
(restaurants, personal care, automotive etc.)

4. Q: Who’s a franchisee?
A: You are the franchisee. A
franchisee is the individual in the
franchise agreement who
purchases the right to operate the
business under the franchisors
name by using their licenses,
trademarks, methods, procedures
and/or systems.

5. Q: Who’s a franchisor?
A: The franchisor is the parent company that
grants the franchisee the right to use the
licenses, trademarks, methods, procedures
and/or systems.

6. Q: How much does a franchise cost?
A: Depending on the specific type of franchise that an aspiring franchisee is looking
to invest in, costs vary greatly. Some lower investment franchises can cost as low as
$10,000, however some franchises can cost up to $5 million. All franchise systems
have a franchise disclosure document (FDD) that can be made available to those
interested in an available franchise opportunity. This document outlines the
franchise agreement and terms of the agreement in a list of items, including all of
the associated costs.

7. Q: How much does a franchise cost?
There are three main costs that franchisees typically pay to the franchisor:
• Franchise Fee: This can be found in Item 5 and is a one-time fee. The franchise fee is the
amount of money that a franchisee pays to the franchisor initially to virtually “buy into”
the franchise system.
• Initial Investment: This can be found in Item 7 of the FDD and outlines the costs that
the franchisee will need to pay in order to open the franchise and get it off the ground
and running. Necessities such as real estate, equipment purchases and business licenses
are factored into this cost.
• Royalty fee: The majority of franchisors have their franchisees pay them a recurring
royalty fee on a weekly, monthly or yearly basis. These royalties are typically total to a
certain percentage of the franchise location’s gross sales.

8. Q: Do franchisees receive any support?
A: Franchisors provide continual guidance
and support to their franchisees.
Franchisees pay their franchisor a royalty
fee in their agreement to use their
properties, so franchisors only succeed
when their franchisees succeed.
Franchising is a great alternative for
individual aspiring to become self-
sufficient but don’t completely want to be
in their business alone.

9. Q: Do I have to work in my franchise
full-time?
A: Most franchisees do work in their
franchise as a full-time position – trading
in their previous 9-5 job for complete
franchise ownership. However some
franchise brands offer semi-absentee
franchise ownership option in which the
franchisees typically works 10-15 hours a
week in their franchise once it’s up and
running. For more information about
semi-absentee franchise ownership, learn
more by clicking here.

10. Is Franchising the Right Fit For You?
Do you want to learn more about the franchise industry and if it may be the right
fit for you to achieve your self-sufficiency dreams? Contact an alternative career
coach at The Entrepreneur’s Source. E-Source coaches are seasoned with
franchise knowledge and are trained professionals in helping their clients
identify if franchising is right for them. Contact a coach at The Entrepreneur’s
Source franchise today:
http://www.entrepreneurssource.com/contact.html.

11. Contact us
 800-289-0086
 http://www.entrepreneurssource.com/blog
 blog@theesource.com